Greens 'Vacancy Tax' Deeply flawed and based on bad data

Felicity Moore

13/11/2017

THE Green Party’s “vacancy tax” is poorly researched, lacks credible data and is deeply flawed and if it were introduced would result in placing unfair financial costs on property owners while failing to solve the problem it aims to solve – a perceived lack of affordable housing.

REIQ CEO Antonia Mercorella said the policy was a massive disincentive to investing in Queensland real estate.

“The Greens claim this policy will raise $800 million over five years, but that would require an annual median house price growth of a whopping 8.6 per cent for five consecutive years,” Ms Mercorella said. “That’s simply preposterous.”

“Anyone with a passing knowledge of the Brisbane property market would know our market has been growing at around 3-4 per cent over the past few years,” she said.

The Greens make no mention of the cost of implementing the program.

“Who is going to monitor and regulate this? There’s an enormous level of red tape being added to the property sector with this flawed policy,” Ms Mercorella said.

Rather than gather Brisbane LGA data, the Greens have assumed Brisbane’s breakdown of vacant residential property between houses and apartments is identical to Melbourne, which is 40 per cent of vacant properties were apartments while 60 per cent were houses.

“There are some disturbing assumptions made in this poorly considered policy. Brisbane is significantly different to Melbourne and so any calculations based on the assumption that these two cities are identical is clearly flawed.

“Based on our calculations the likely revenue would be vastly less, not in the hundreds of millions, as the Greens would have you believe,” Ms Mercorella said.

A third of Queenslanders rent their home (34 per cent) and the market relies very heavily on private landlords providing rental accommodation.

“This policy is written for a tight rental market where vacancies are low but Brisbane’s vacancy rate is 3.6 per cent, and this market offers many affordable options for renters.

“Anything that is a massive disincentive to owning property will result in investors moving their money elsewhere. The majority of property investors in Queensland are mum-and-dad investors who are planning for their retirement. Why are the Greens focused on punishing them?”

Real estate is one of the State Government’s single biggest revenue sources and the profession employs around 34,000 Queenslanders.

The Greens have also announced a policy banning no-fault tenancy terminations. This policy would prevent landlords having the right to end a tenancy at the agreed contract end date, but would allow tenants to continue a tenancy until it suited them to end it.

“Their assault on property owners is unceasing and they are trying to paint the everyday property investor as some kind of Dickensian greedy fat-cat slumlord out to rip off the hapless tenant.

“Landlords want good tenants and want long-term relationships to minimise turnover and ensure longer term security for their investment.

“But the impact of the Greens’ ill-considered, fiscally irresponsible policies will be to drive investors to other forms of investment.

“This will leave renters in the unfortunate position of having to compete for fewer rental properties, driving up price and disadvantaging the lower socioeconomic renter,” Ms Mercorella said.

A vacant property tax has been introduced in cities such as Paris and Vancouver, where populations are vastly bigger than Brisbane and rental accommodation is tight. It is also being implemented in some suburbs of Melbourne, at 1 per cent of the capital-improved value.

The conditions in these larger, more densely populated cities is vastly different to Brisbane and this type of policy is simply inappropriate.

“The REIQ calls on the major parties to denounce these policies that would ultimately be destructive to the real estate sector and detrimental to Queenslanders.”